Settlement Agreements and Lacking Mental Capacity
2nd December, 2016
The recent case of Glasgow City Council v Dahhan UKEAT/0024/15 considered whether an Employment Tribunal had jurisdiction to decide whether lack of mental capacity meant a settlement agreement was unenforceable.
Mr Dahhan was employed by Glasgow City Council as a teacher. He brought tribunal claims for direct discrimination, harassment and victimisation because of race but the parties entered into a settlement agreement whereby Mr Dahhan gave up all claims arising from his employment with the Council, with the exception of claims in respect of enforcing the agreement, personal injury claims not apparent at the time of signing and pension claims.
Mr Dahhan later wished to withdraw his claims which were dismissed under Rule 52 of Employment Tribunals (Constitution and Rules of Procedure) Regulations 2013. Mr Dahhan subsequently asked the tribunal to reconsider the dismissal of his claims, stating that he lacked capacity to instruct his solicitor and to make decisions at the time that he entered into the settlement agreement.
The Employment Judge held that the tribunal had jurisdiction to set aside the settlement agreement on the ground that it was invalid because Mr Dahhan did not have the capacity to contract at the time he entered into it.
The Council appealed the decision but the Employment Appeal Tribunal dismissed the appeal.
This is the first case to consider whether a tribunal has jurisdiction to set aside a settlement agreement due to a party not having contractual capacity at the time of entering into it.
If you are facing claims from an employee or would like to enter into a settlement agreement, contact our Employment Department for specialist legal advice.
You might also be interested in...
9th August, 2018
We have been approached by a number of clients who have received a statutory demand, either personally or to their company, and they have asked us what to do about it. One business was contacted by a company demanding payment of a debt owed under a contract for TV advertising in a shopping mall. We presume – but... Read More »
3rd August, 2018
Agriculture and Estates specialist Ben Brassington has strengthened the services offered by Top 200 legal firm Aaron & Partners LLP A dairy farmer with more than 18 years’ experience as a Partner in his family’s farming business has been appointed by a top legal firm in Shrewsbury. Ben Brassington, who has also been working for several years as... Read More »